Integrating People, Process, Technology, and Strategy: The ...

Integrating People, Process, Technology, and Strategy: The Future of Human Capital Management

By: Larry Dunivan, Senior Vice President, Global HCM Products, Lawson

Integrating People, Process, Technology and Strategy: The Future of Human Capital Management

Executive Summary

Reductions in force. Hiring freezes. Budget reductions. The economic downturn means that the "war for talent" is on hold, and that the focus of HR initiatives has shifted from recruiting new employees to employee performance and development. To keeping the staff you have today and increasing their effectiveness and productivity. To better manage their talent and remain competitive in this kind of environment, organizations are using new solutions to maximize the impact of their employees. They are looking for better ways to tie their workforces to organizational goals and strategies. While multiple-vendor, best-of-breed talent management modules can help with a specific HR function, they are hard to integrate with each other and existing HR systems. As a result, they are limited in their ability to add real strategic value and often fail to address the most important talent-related questions HR leaders say they need answered. So where should the market go? If efficiency and automation have been the name of the game up to this point, how do organizations get to the next level? How can they tap into their workforce to achieve specific business outcomes? The answer ? and the future of HCM ? lies in the three closely related areas of talent management integration, spaces, and information delivery.

About the Author

Larry Dunivan has more than 20 years experience in the design, implementation, and support of human resource information systems. An M.B.A. graduate of the Kellogg Graduate School of Management at Northwestern University, Dunivan has been a regular speaker on Human Capital Management systems. He worked at Lawson from 1995 to 2001 and rejoined the company in 2005, after holding positions at Personnel Decisions International (PDI). He is currently Senior Vice President of Global Human Capital Management Products for Lawson, where he is responsible for sales, services, product strategy, and development for all of the company's HR products. For more insights visit Larry's blog at:

Integrating People, Process, Technology and Strategy: The Future of Human Capital Management

Introduction

We all know that people are an organization's most valuable asset. So it's no surprise that many organizations, both large and small, are interested in seeking ways to gather actionable data about their people to support strategic business decisions. But with such a high level of interest in managing talent more strategically, why do so many organizations fail to effectively capture, manage, and leverage the data associated with their workforce? For many, the trouble begins with the sheer number of different applications human resources departments typically rely on to track "routine" HR activities such as payroll, benefits, and employee records. These systems have traditionally been optimized for automating manual business processes to improve HR efficiency (but not necessarily HR effectiveness or insightfulness). They have been very successful in doing so, but they are weak as strategic talent analysis tools. In spite of a challenging economic climate, HR leaders are still adding a variety of stand-alone applications to these traditional core systems -- applications focused on automating HR processes associated with managing talent, including recruitment, performance management, goal management, compensation management, employee skill development, and succession planning. However, as Gartner observes correctly, "automation, in this sense, is not strategic.... The talent management and workforce management applications being implemented today provide the mechanisms to operationalize HCM strategies. They do not, however, help organizations make the right strategic decisions and investments in HCM." 1 So where is the market heading? If automation has been the name of the game up to this point, how do organizations move to the next level? How can they tap into their workforce to achieve specific business outcomes? The answer ? and the future of HCM ? lies in the three closely related areas of talent management integration, spaces, and information delivery.

Talent Management Integration -- The Future of Technology

Let's take a step back and examine more specifically what HR leaders have been saying they mean when they talk about getting more strategic about managing human capital. Lawson recently surveyed 150 HR departments to get a closer look, and found some of the most important questions HR leaders want their talent management applications to answer include: ? Who are my high-potential employees and how do I keep them? ? Where can I find more leaders both internally and externally? ? Are our talent management strategies aligned with our corporate goals? ? Do we align pay with performance? ? Which employees are getting ready to leave?

1 Gartner, "Hype Cycle for Human Capital Management Software, 2008", July 9, 2008

Integrating People, Process, Technology and Strategy: The Future of Human Capital Management

? Will our compensation plan motivate our people to stay? ? Do we have succession profiles for key jobs? Do they help us recruit, retain,

promote, and reward our best employees? ? Do we have a single data source for all information about our people? With such intense interest from HR leaders in gaining visibility into their talent, it's no surprise that the market for stand-alone talent management applications has matured quickly. According to the previously referenced Gar tner repor t, however, when taken as a whole, adoption levels of integrated talent management systems are significantly lower when compared to stand-alone investments. What does this tell you? Clearly, we know that many organizations recognize the need to implement talent management strategies to address their growing business-related issues and objectives. Yet today, the ability to access core HR data and use it effectively through talent management applications varies widely across all organizations, no matter the size. This accumulation of separate software applications used to manage talent is well-meaning but creates barriers for integrating data, analyzing it, and bringing conclusions to strategic decision making. It's ultimately self-defeating.

Relying on fragmented legacy systems and "stop-and-go" interfaces will simply not be an option for organizations who wish to remain competitive in the face of these massive workforce changes.

The fact is that there are few ways to easily allow data to flow from one "best-of-breed" application to another, short of a massive (read: expensive) IT effort to integrate the data. Many of these point solutions have unusual and proprietary data structures and architectures that confound even the most clever integration efforts. Even worse, the resulting overlapping platforms erode data integrity. As organizations battle to integrate data from multiple applications, the complexity overwhelms people and soon budgets are overspent. Companies end up spending more time trying to integrate data than using it strategically. In the past, the urgency to have this kind of data readily available was not as important, as significant talent shortages in the labor market were rare. With so many more well-educated employees entering the workforce to replace smaller numbers retiring, HR could afford to focus only on optimizing HR processes. How times have changed: ? Research shows that many thousands of employees leave the U.S. workforce

every week ? The news about the growing unemployment rate is a concern to all of us ? The Corporate Leadership Council believes we can expect to see 33 percent

annual turnover at executive levels within the next five years, with more than 76 million Americans retiring in the next ten ? And the American Society for Training and Development indicates that only 46 million will enter the workforce to replace them

Integrating People, Process, Technology and Strategy: The Future of Human Capital Management

In the current economic climate, it's all about making rapid, well-informed decisions about your workforce. Aligning people with business objectives. Identifying, developing, and retaining the best and brightest. Relying on fragmented legacy systems and "stop-and-go" interfaces will simply not be an option for organizations who wish to remain competitive in the face of these massive workforce changes. It's more important than ever that HR leaders have automated access to core employee and candidate data. Even more important, they must be able to leverage that information in talent management applications that ensure that the right people are being hired, developed, and retained to execute the organization's distinctive strategies.

Organizations with integrated talent management systems -- systems that help them make the smartest decisions about their people -- position themselves for greater organizational success.

Using modern technologies to align talent management practices with business objectives creates a "bridge" between process and strategy that is critical to an organization's competitiveness and profitability. An integrated talent management approach gives an organization the ability to tie together employee system-ofrecord data with higher level talent management and workforce management applications. An integrated system helps organizations to move beyond automation, using analytics to leverage data more effectively and make informed decisions in support of business objectives. This approach also allows organizations to update employee data automatically across the entire system, reducing the number of audits and controls necessary to ensure data integrity. And that translates into more time for HR professionals to act like true knowledge workers and keeping the busy work to a minimum. In addition, successful talent management systems include competency models that help measure the skills, knowledge, attributes, and behaviors that define employee success in particular roles, and link these measurements directly to an organization's values. This is important, as it gives HR leaders the ability to build success profiles for each position within the organization, allowing them to quantitatively measure what "good" looks like. With an integrated system, HR leaders also can use core competency data across all dimensions of talent management, allowing them to: ? Recruit for desirable behaviors because they know which consistent attributes

produce high performers ? Measure performance based on characteristics that are tied to competencies

correlated to desired organizational outcomes ? Encourage those behaviors by rewarding people who demonstrate them ? Look for people to move to new jobs who demonstrate attributes that

describe great performance in the target positions ? Train employees who have a gap in critical knowledge, skills, or abilities that

define success in a position

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